Unit 3

Question 1

A mistake that concerns the future market quality of the object of the contract is

Answer 1

A mistake of value.

Question 2

A mistake that occurs when both parties to a contract are mistaken about the same material fact is

Answer 2

Bilateral

Question 3

If the delegation of duties are not performed, then the obligee can sue

Answer 3

The delegator and the delegatee

Question 4

Steel Mill, Inc., makes an offer to Tom to enter into a contract to work as a mechanical engineer for a certain salary for one year, subject to a five-year renewal based on his performance. Tom accepts the offer. This is a valid contract because it includes

Answer 4

An offer and an acceptance.

Question 5

Alyssa hires Bret to mow Alyssa’s lawn every Friday. Although they do not discuss the terms of payment, after each of the first three Friday mows, Alyssa pays Bret on Saturday. The payment term is

Answer 5

Implied

Question 6

Donald is a minor. He can enter into any contract an adult can, provided

Answer 6

The contract is not one prohibited by law for minors.

Question 7

A third person who receives an unintentional benefit from a contract even though the contract was not made for that person’s benefit is

Answer 7

An incidental beneficiary.

Question 8

When an innocent party is fraudulently induced to enter into a contract, the contract normally can be

Answer 8

Avoided

Question 9

Rue offers to pay Sari to deliver certain documents within thirty minutes. Sari can accept the offer only by completing the task within the deadline. If she does, Rue and Sari will have

Answer 9

A unilateral contract.

Question 10

Alice tells an interested buyer, Mark, that her condo has no defects, but she knows that the plumbing is problematic. If Mark relies on Alice’s statements, then he is

Answer 10

Justified

Question 11

The UCC contains Statute of Frauds provisions for

Answer 11

Sales and lease contracts.

Question 12

When a breach of contract occurs, the innocent injured party can

Answer 12

Mitigate damages.

Question 13

Steel Mill, Inc., agrees to deliver a certain quantity of steel to T-Bar Framing Corporation. The agreement states that delivery is to be within “9” days, although the parties intend “90” days. The seller cannot convince the buyer to amend the contract. The most appropriate remedy is

Answer 13

Reformation

Question 14

Intoxicated, Efron enters a contract for the sale of his business, Freight Dispatch, to Gretel for less than its market value. This contract is enforceable if, at the time,

Answer 14

Efron understood the legal consequences.

Question 15

Mel agrees to work as a freight broker for National Shipping, Inc. In determining whether a contract has been formed, an element of prime importance is the parties’

Answer 15

Intent

Question 16

For a contact to be considered valid and enforceable, the parties to a deal must

Answer 16

Manifest their voluntary consent to the same bargain.

Question 17

Under a contract with Valley View Villas, a residential development, Weng begins grading a terraced hillside. Halfway through the project, Weng asks for $5,000 over the contract price, claiming an increase in the “cost of doing business.” Valley View agrees. This agreement to pay more is

Answer 17

Unenforceable because Weng’s performance was a preexisting duty.

Question 18

Rex contracts with Spicy Pizza to deliver its products. After the deal has been partially performed, both parties inform each other that they would like to cancel the contract. Rex and Spicy may rescind

Answer 18

Their contract to the extent that it is executory.

Question 19

Field Construction, Inc., contracts with Mesa Ranch to build a new horse barn on Mesa’s property for which Mesa agrees to pay. If this is a valid contract, it will be partly because it includes the element of

Answer 19

Legality

Question 20

Albert is a veteran. If Trevor, Albert’s guardian, induces Albert to sign documents giving him power of attorney to access his bank accounts, Trevor would be exerting

Answer 20

Undue influence

Question 21

The remedy for a seller’s breach of a contract for a sale of real estate is

Answer 21

Specific performance.

Question 22

Allen promises to pay Barb, his niece, $5,000 if she obtains her degree at City University, where she is in her third year. Barb graduates. Allen must pay Barb because

Answer 22

Barb obtained a degree at City.

Question 23

Which of the following is an element that must occur for a fraudulent misrepresentation?

Answer 23

Intent to deceive.

Question 24

Cindy, a real estate agent, sells her friend Doug’s house without charging a commission. In return, Doug promises to give Cindy $1,000. This promise is not an enforceable contract because

Answer 24

The house has already been sold—the consideration is past.

Question 25

Kent tries to start his car with no success. He yells that he will sell the car to anyone for $10. Livy, a passerby, hears Kent’s yell. This is not an effective offer because it lacks

Answer 25

Serious intent.

Question 26

The additional terms automatically become part of the contract unless one of the following conditions arises

Answer 26

The new or changed terms materially alter the contract.

Question 27

Cathy agrees to sell her Daily Donut shop to Ernie. In the agreement, there is a covenant not to compete that prohibits Cathy from operating a donut shop within a certain distance. If the restriction is unreasonable, a court will most likely

Answer 27

Reform the covenant.

Question 28

Dale’s Uncle Ed tells Dale, “If I feel you deserve it at the time, I will give you a new car when you graduate from college.” Ed’s promise is

Answer 28

Illusory

Question 29

Only a mistake of fact makes a contract

Answer 29

Voidable